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Future Shop was a Canadian electronics store chain. First established in 1982 by Hassan Khosrowshahi, by 1990, the chain had become the country’s largest retailer of computer and consumer electronics. As of January 2013, the company operated 139 locations across Canada.
In November 2001, Future Shop was acquired by the American consumer electronics store chain Best Buy for $580 million. Although Best Buy would begin to establish Canadian locations under its own brand following the purchase, it continued to operate the Future Shop stores as a separate brand, even though many of the new locations were in close proximity to existing Future Shop stores.
On March 28, 2015, Best Buy announced the immediate closure of all Future Shop locations; 65 of the former locations are slated to be re-branded as Best Buy stores, while the remaining 66 were closed permanently.
Future Shop was founded in 1982 by Iranian entrepreneur Hassan Khosrowshahi, who left Iran to settle in Vancouver, British Columbia to start a retail business. Khosrowshahi graduated from the University of Tehran with a degree in law and economics and was a part of the family who owned the Minoo Industrial Group, a large Iran manufacturer of pharmaceuticals, cosmetics, and food products. Khosrowshahi planned to open a chain of consumer and home electronics stores and take over the Canadian retail market. His associate, Ardeshir Ziabakhsh (Ardy Zia), took the role of president and CEO of the newly formed company and Khosrowshahi served as chairman and founder. In 1983, Future Shop opened the first three stores, all of which were in British Columbia. The company sold computers, software, games, videocassettes, audio equipment, music, and other items. By December 1983, the first month all of the Future Shop stores were opened and making business, the company reached $2.8 million in sales.
By 1990, Future Shop became the largest retailer of computers and consumer electronics in Canada and was operating 38 stores across the country and parts of the United States. In August 1993, Future Shop went public on the Toronto Stock Exchange, making $30 million to be used for expansion and to pay off debt.
By the end of 1995, Future Shop’s sales had reached more than $1 billion, with more than $38 million EBITDA (earnings before interest, taxes, depreciation and amortization)
In 1997, Future Shop announced a change in management, with Ziabakhsh leaving the company. Khosrowshahi took on the roles of president and CEO, in addition to serving as chairman. Many people from company headquarters were let go during this transitional period.
In December 2011, Future Shop opened its first liquidation centre Greenfield Park, Quebec.
At the end of March, Future Shop’s Canadian division had produced record-setting sales and earnings for the company. However, the company’s earnings were down 20 percent from the previous year, because of many losses caused by its failing U.S. operations. Despite plans for more locations in the U.S. over the next several years, the company instantly stopped any new plans for further United States expansion until the existing U.S. stores improved their sales performance figures.
Focusing on Canadian markets
In 1998, Future Shop purchased the Canadian division of Computer City from CompUSA, three months after the Computer City chain had been merged into CompUSA and either converted to CompUSA or closed and liquidated. During the next year, two of the Computer City retail stores were liquidated because of poor sales. In addition, the competing Adventure Electronics in Ontario and Quebec closed, leaving Future Shop as the only big-box electronics retailer in Canada.
By the end of 1998, the U.S. locations of Future Shop were performing badly, with $53 million in losses over the last few years, and Future Shop projected another $30 million in losses would occur by the end of the next year. After major losses in sales, in March 1999, the company announced that it would close U.S. operations, holding liquidation sales and closing down in the summer. The closures left Future Shop with 81 stores across Canada. Many of the former stores ended up converting to one of its major U.S. competitors, Best Buy.
In 2000, Future Shop owned 83 Future Shop stores and five Computer City stores. In June 2000, Future Shop announced plans to open flagship stores in downtown Vancouver, Toronto, and Montreal.
In February 2001, Future Shop announced that the company would close and liquidate the five remaining Computer City stores because of poor sales. At the same time, Future Shop also attempted to acquire Chapters, a chain of book stores in Canada, but failed to come up with a reasonable offer.
Best Buy buyout
In March 2001, American-based Best Buy acquired Future Shop for $580 million Canadian. Future Shop was to be run as a separate division as “Best Buy Canada”. The acquisition caused Khosrowshahi to step down as president. The other executives from Future Shop retained their positions within the company.
Best Buy Canada has continued to operate Future Shop as a separate division, with most locations under their original name. Future Shop stores are still being added, most recently in South Edmonton Common in Edmonton. The company has also begun renovating some of its stores to focus more on product specialty areas, to separate video games into their own department, and to create a central “hub” featuring employees specializing in connecting different devices together. The first such renovated Future Shop store opened in August 2008 at Park Royal Shopping Centre in West Vancouver, British Columbia.
In a few cases across the country, either the existing Future Shop location is in the same shopping centre as the more-recently opened Best Buy location or the two stores open in tandem in close proximity. Examples include Lansdowne Centre in Richmond, British Columbia; Heartland Town Centre in Mississauga, Ontario; Centre Laval, Laval, Quebec; Marché Central in Montreal; Promenades Saint-Bruno, Saint-Bruno-de-Montarville, Quebec; Merivale Road in Ottawa; in St. John’s, Newfoundland and Labrador; and Northland Village Mall in Calgary. The former Future Shop store in Montreal inside Carrefour Angrignon had been converted to Best Buy in 2005, even though Future Shop moved nearby outside the mall before that.
Downsizing and closure
On January 31, 2013, Best Buy announced that it would begin to close various locations, including 8 Future Shop locations effective immediately, as part of a “long-term transformational strategy to optimize the company’s retail footprint across the country.” The company also planned to target more resources toward its online retail operations to compete against other major online retailers such as Amazon.com. These closures included locations in New Westminster, Nanaimo, Victoria, Langford, Surrey, Lachenaie, and Sherbrooke. On January 30, 2014, 950 employees across both brands were laid off.
In 2014 and 2015, other Future Shop locations were closed, including those in Boucherville, Greenfield Park, Montreal, Ottawa, Regina, Kingston, New Minas, and New Glasgow.
On March 28, 2015, Best Buy announced that all remaining Future Shop locations would be closed immediately. According to Best Buy, 65 of the 131 Future Shop locations would re-open a week later as Best Buy stores (expanding Best Buy branded stores to 136 Canadian locations), while the remaining locations would remain closed permanently. The company argued that these closures were to reduce redundancy, as many of Future Shop’s remaining locations (particularly, those targeted by the closure) were located within close proximity of a Best Buy—sometimes within the same parking lot. The closures resulted in the loss of 1000 part-time and 500 full-time jobs. In turn, the company announced that it would invest $200 million into its remaining Canadian locations, and begin to offer home appliances across all Best Buy stores in Canada.